Mexico's ruling party is preparing a defense against charges of campaign funding violations from the 2000 presidential race that resulted in the election of President Vicente Fox. The ruling against the National Action Party, or PAN, is widely seen as an advance for Mexico's democratic system.

On Wednesday, PAN leaders will have the opportunity to present their defense in a last-chance move to avoid a fine set by the independent Electoral Institute at over 300,000 pesos. But the damage to the image of the ruling party has already been done, and the PAN is likely to lose its case.

Mexican commentators said democracy and the rule of law have been bolstered by the investigation of campaign finance violations and the ruling last Thursday by the Electoral Institute against the PAN and the Green Party, which had been in alliance with the PAN in the 2000 election. The victory of Mr. Fox in that election brought an end to 71 years of one-party rule by the Institutional Revolutionary Party, or PRI, and ushered in the kind of openness and transparency in government that the Electoral Institute's action represents.

The Federal Electoral Institute gained autonomy from the government in 1996, and has acted as a guarantor of elections and an enforcer of election law ever since. Earlier this year the IFE, as it is called using its Spanish initials, also fined the PRI for using funds in the 2000 campaign that had been diverted from the state-owned oil company. The PRI fine of one billion pesos (nearly $100 million) was the highest such fine ever imposed against a party in Mexico.

One of the main charges against the PAN involved funds that came from a foreign source. Foreign funding of election campaigns is prohibited under Mexican law. The IFE cited two such payments in its report, one for $100,000 and another for $160,000. The IFE report did not name the alleged donors.

The ruling against the PAN is a further setback for the party following the mid-term election earlier this month that resulted in the PAN losing seats in the Congress, and the PRI gaining seats. Since Mexican presidents are limited to one six-year term, the IFE ruling against the PAN will have no effect on President Fox, who has said he was unaware of any campaign finance violations.